Saturday, February 18, 2017

Tirumala Tirupati Devasthanams: Increase revenue from rich & upper middle class. Spare the poor & middle class

Times of India has an article that Tirumala Tirupati Devasthanam (TTD) wants to hike ticket prices.

TTD tickets range from Rs 50 to Rs 5,000. Most devotees buy special darshan tickets for Rs 300. At least 2,000 devotees go for VIP darshan every day, shelling out Rs 500. "The revenue gap can be bridged with a mild hike in ticket rates or Rs 5 to Rs 10 raise for various seva," said officials. 

It's BAD IDEA to enforce across the board hike! In fact, it is a lazy move. Instead, target additional revenue through higher revenue from rich and upper middle class. In my calculation below, let me show you how TTD can raise additional revenue of Rs 500 crores without increasing cost on middle class and the poor.

TTD's image of subsidizing the poor while collecting higher rates from the rich is not entirely accurate. TTD leaves a lot of money on the table when it comes to optimizing revenue from the upper middle class and the rich. TTD can do both - subsidize the cost for the poor and increase exponentially the charges for the upper middle class & rich for the same service that they receive today.

Before we get to recommendations, let's look at revenue streams for TTD. From TTD 2016-17 Annual report summary:

  • Investment & Capital Income: Rs 1,889 crores (70% of all revenue)
  • Hair: Rs 150 Crores. Leave it untouched
  • Loans & Advances to Employees; Lease charges for asset utilization: Rs 171 Crores
That's Rs 2210 crores of Rs 2678 crores that i am not recommending any change.

Accommodation: Rs 114.50 Crores
  • Leave all accommodation at Rs 200 & below untouched. I am assuming that 80% of all revenue - Rs 91.6 crores from these levels. 
  • All rooms above Rs 200 to Rs 499 - double the room rates
  • All rooms above Rs 500 to Rs 1999 - Increase the room rates by 4 times
  • All rooms above Rs 2000 - Increase room rates by 8 times
  • Institutionalize dynamic pricing that increases all room rates above Rs 200 by up to 8 times during peak season - These accommodation are occupied by the upper middle class, businessmen & politicians and not middle class citizens
  • Target: Increase room rate from Rs 200+ rooms from Rs 20 Crores to Rs 75 Crores in 2 years - Rs 55 Crores increase in revenue
Seva: Rs 55 Crores
  • Sevas can be classified into 2 categories. Category 1: Niche, low volume seva tickets (Suprabatham, Thomala Seva, Archana, Abhishekam, Visesha Pooja, Tue-Thu Morning Sevas). Category 2: Mass, large scale seva tickets (Kalyanam, Brahmostavam, Vasanthotsavam, Sahasra Deepalankarana Seva. I assume that 85% of revenues come from Category 2 - Rs 47 Crores. Rs 8 Crores from Category 1.
  • Category 1 Seva Tickets: Align to market price
    • Less than 10% of Category 1 tickets go to middle class & poor. It's usually the rich and the upper middle class that garner most of these tickets. I don't see pilgrims complaining 10 fold increase in these rates. That takes the revenue from Category 1 seva tickets from Rs 8 crores to potentially Rs 80 Crores.
    • Anyone who can prove that their income is less than Rs 3 lakhs per year by producing their IT returns of the past year can avail the tickets at 50% of the new price. Without IT return, no discount can be provided.
    • I've heard rumors of Abhishekam tickets hawking for Rs 3 lakhs for vastram and Rs 50,000 for vessels. I am sure Rs 125,000 for Abhishekam and Rs 7,500 for vessels will not break the bank for those try for these tickets. 
    • Even assuming 20% of all tickets are sold at 5 times current price, Sevas can bring in Rs 72 Crores, 9 time increase from today's price
  • Leave Category 2 prices at current level. I do have a recommendation for additional revenue from Category 2 by bringing back earlier seva tickets
    • Till mid-2000s, some of these seva tickets were 5x-10x the cost with the rights to bring additional members. For the high cost, TTD issues Silk Clothes, additional ladies. 
    • I understand their logic of charging Rs 250 per ticket for each Vasanthotsavam participant rather than charging Rs 2500 when only a family of 2 adults travel. However, if you give them both the options with the Rs 2500 ticket having silk clothes & more ladoos, you are giving the same experience to the pilgrims but optimizing the revenue from those who wish to pay
    • Bring back 2 Tier Seva system - 10x for the higher tier (silk clothes, additional ladoos) and retain existing middle class friendly tier without reduction in benefits
    • I can safely say 10% of folks in Category 2 will prefer to buy higher tier seva tickets. That's Rs 42 crores increase (Rs 47 crores instead of Rs 4.7 Crores) in Category 2 seva revenue
In summary, TTD can take Seva Ticket revenue from Rs 55 crores to 151 crores - Rs 106 crores

Darshan Tickets: Rs 209 Crores

There are 4 types of darshan tickets - Free, Rs 50, Rs 300 (Quick Darshan) and Rs 500 (VIPs - Cat 1, 2, 3). 
  • VIP Tickets:
    • All VIP tickets need recommendations from top bureaucrats &/or politicians. Category 1 is for the highest level and is mostly self-declaration. In my interactions with Temple officials, the average volume is 100 Category 1, 400 Category 2 and 600 Category 3 VIP tickets daily yielding Rs 20 crores approximately
    • In 2015, Deccan Chronicle reported TTD insiders selling Category 1 tickets for Rs 10,000
    • My PoV is that Category 1 & 2 can see 10x increase in prices without losing demand while Category 3 ticket prices can be increased 5 times. So, if you want the privilege of 'VIP Darshan', asking to shell out Rs 5,000 for Category 1 & 2 and Rs 2,500 for Category 3 isn't out of the ordinary. 
    • Revenue Increase from VIP Tickets from Rs 20 Crores to Rs 140 Crores
  • Quick Darshan:
    • There are 23,000 Quick darshan tickets every day (Will link once i find it!). I say that we have ticket purchase utilization of around 60% (just a guess). That's Rs 83 Crores
    • Increasing the ticket price to Rs 400 isn't going to reduce the demand. So, revenue goes up to Rs 111 crores. Even accounting for elasticity of demand (trust me, it doesn't exist) - Rs 100 crores isn't out of reach
    • Introduce Dynamic demand for Quick Darshan tickets of upto 2x price around key holidays. Of the current capacity of around 200 days, around 50 days can qualify as high demand days. That's Rs 25 crores of additional revenue from Quick Darshan - once again, a service used mostly by upper middle class & the rich
    • Between price raise from Rs 300 to Rs 400 and introducing Dynamic demand, TTD can increase quick darshan tickets from Rs 83 crores to Rs125 crores
  • Rs 50 Ticket
    • Leave it unaltered
Without affecting middle class used Rs 50 ticket and by targeting additional revenue realization from VIP & Quick Darshans, TTD can add Rs 162 crores in additional revenue from darshan tickets

Prasadam Receipts: Rs 175 Crores
  • Leave Ladoo Prasadam price as-is. It costs Rs 34 to produce but is sold for Rs 25. With 3 lakh ladoos a day, Rs 100 crore subsidy.
  • My recommendation is for TTD to ramp up Prasadam sale in other areas to cover for this loss. Let me show you 2 such areas
  • Big Ladoos are only available for Kalyanam tickets or letter from JEO. There's demand for open market sale and TTD should consider 5000 large ladoos at 100% mark up price. At 5 times the weight, let's assume that the cost/gm remains the same. That's a cost of Rs 170 per Big Ladoo. I am sure there's demand for buying large ladoos at Rs 300/large ladoo. That's Rs 55 Crores of additional income every year and an ability to decrease small ladoo subsidy by Rs 24 Crores.
  • Vadas: Vadas are available only for Kalyanam tickets. It's a pain to get prior approval for additional vadas. Assuming each vada cost Rs 100 to make (just guessing!) and if sold for Rs 200, my guess is that there's demand to sell 5000 vadas a day. That's Rs 36 Crore revenue for Rs 18 additional cost and more importantly covering Rs 18 Crore of the ladoo subsidy
  • Annam Prasadam (Rice Prasadam): In 2009, during my trip, we purchased Sweet Pongal Prasadam for Rs 350 and received 3 Kgs of Prasadam after the food was offered to the Lord in the morning. Unfortunately, this scheme was revoked shortly thereafter. Why not bring it back and make it pilgrim friendly
    • Rs 75 for 100 gms of rice prasadam (Tamarid Rice, Pepper Pongal, Curd Rice, Sambhar Rice, Sweet Pongal) - 1 package per pilgrim
    • Rs 500 for 500 gms - max of 5 packages
    • Rs 3000 for 1000 gms - unlimited
    • Have a daily preparation quota for the first 2 years. Let's say 1000 Kgs (might seem a lot but the TTD kitchens prepare this quantity as free 'Prasadam' every day)
    • Assuming 600 Kgs for 100 gms packet; 300 Kgs for 500 kms packet and 100 Kgs for 1000 gm packages - Annam Prasadam will yield revenue of Rs 130 Crores per Year
  • My estimate is that TTD will be able to absorb up to Rs 50 Crores of Ladoo Subsidy through this scheme, thereby reducing the ladoo subsidy from Rs 100 crores to less than Rs 10 crores - though subsidy reduction isn't the main aim. Additional services & privileges to pilgrims is the main intent here
In total, Government will increase Prasadam sale from Rs 175 crores to Rs 400 Crores.


I don't have details on lease, hair revenue schemes and thus let it stay as-is. Let's summarize Revenue stream increases:
  • Accommodation: Rs 114 Crores to Rs 170 Crores
  • Seva Tickets: Rs 55 Crores to Rs 106 Crores
  • Darshan Tickets: Rs 209 Crores to Rs 371 Crores
  • Prasadam Tickets: Rs 175 Crores to Rs 400 Crores
Thus, revenue from these 4 streams will increase from 553 crores to 1,047 Crores - nearly 500 crores jump in TTD revenue. Instead, TTD will be happy to do Rs 5-20 raise across the board. Is that logical or justified?

Let me know your thoughts ...

Wednesday, August 15, 2012

Indian fan apathy to blame for Olympics, not Administration or Athletes

Do you know who Irfan Thodi is? Vikas Gowda? Joydeep Karmakar? Heena Sidhu? Ngangbam Chanu?

These are atheletes from India who made us Proud in Olmpics but we ignore them because they didn't return a medal. Irfan finished 10th in 20km walk. Vikas Gowda finished 8th in Discus throw. Krishan Poonia finished 7th in Discus throw. Joydeep Karmakar finished fourth in 50m rifle prone. Henna Sidhu finished 12th in 10m air pistol. Ngangham Chanu finished 7th in 48kg weightlifting.

Yes. They didn't win medals like 6 other Indians but because the public won't recognize the contribution of these athletes and will not give them a lakh (when bronze gets them 100 times that amount - Rs 1 Crore!), the apathy of a regular Indian guy is the main contributor to our poor Olympics performance. OK, when was the last time you stepped out for a hard run? or a competitive sport?

If i was made the Sports Minister or the Prime Minister and asked to solve the Olympics connendrum that we face, this will be my vision, goals and action plan

Vision: Healthy & Prosperous country. Through our health initiative, ensure that sports is a mainstream activity in an Indian's life

Goal: 10 Golds by 2028 Olympics. 25 Golds by 2040 Olympics. These are not far away. 2028 is 4 events away and 2040 is  three more from then.

Action Plan: Here is my top 10 actions

1. Starting this year, all school will make PT (Physical Training) a mandatory subject in school. Schools will have to spend as many hours in a week on PT as they do for Mathematics. Physical Training will be a 100 mark subject with 20 marks for drills and 80 marks for performance in 2 sports of choice.

2. Every school will have to mandatorily offer these 3 sports: Track & Field, Swimming and Cricket. In addition, they will have to offer at least 5 from these sports: Archery, Badminton, Cycling, Hockey, Gymnastics, Shooting, Table Tennis, Volleyball and Water Polo. Of the minimum 8 sports, schools are expected to have in-house facilities for at least 4 sports

3. Every Municipality will have to offer at least 5 of the above sports in their juristiction. Every MLA constituency will have to have facilities for at least 12 of the 2016 Olympic sports available for Public. Every MP constituency should have facilities for at least 20 of the 2016 Olympic sports available for Public. Every state should have facilities for ALL 2016 Olympic sports available for Public.

4. Twice a year, ALL students in the constituency have to participate in a District level competition. Every student has to enroll for atleast 2 sports and their performance will go towards their overall academic evaluation till Standard 9. Once a year, there should be a mandatory Schools competition across the state. This should be fixed for first week of October (9 day event starting 1st Saturday of October and ending on the 2nd Sunday of October).

5. National Games are a joke in India because they are not even conducted on a regular basis. National event will be once every 2 years and will be held between the first Saturday of March to the second Sunday of March.

6. Every Olympic sports council/association will have at least 5 International infrastructure tie-ups and at least 1 Academy in each of the 5 zones - North, East, West, South & Central. The Academy will be chartered to identify talent at School level and charter individual plan of actions for these athletes

7. Dismantle SAI. Re-create it from scratch. At least 90% of SAI budget should go towards new infrastructure, conducting competitions, reward prizes. Maintenance of existing or finished infrastucture will be done by the sport committees. No more than 10% to be spent on staff and their salary, maintenance and travel expenses

8. Remove quota systems in Universities and Public Sector Companies. Instead, the focus is towards ensuring every child has gone through a few sports. Instead of Quota systems, provide scholarships for students-athletes

9. Ministry of Sports should be a Cabinet Position and not a Minister of State position

10. Change comes from within. As long as India doesn't run, swim, jump, play - don't expect us to win awards. Government & Organizations can build the infrastructure; Schools can formulate your growing years, but it is up to us to ensure that we make Sports a part of our lives

What do you think? Will we change?

Tuesday, February 14, 2012

Budget day dreams ...

There is something about our budget that makes economists, stock market analysts, dealers, industrialists and even common man start day dreaming!
The fever catches as soon as people start breaking their New Year's resolutions, which is typically a fortnight or so into the year. Once, we are done with the festivities & the Republic day, the drumbeat starts to raise its voice and experts and sundry start predicting what the Finance minister will roll into the budget. This year is going to be an extra long journey as the FinMin decided to unveil the budget on March 16th instead of the usual end of February. All the better for media, as they fill time with fantasies about lower taxes, increasing limit of deductabiles or even increasing the various tax slabs. The media will line tons of eager housewives, retirees, 'young but struggling' and 'young and high-flying', public servants, private servants .... you get the picture ... Everyone and their uncle will ask the government for a narrowly defined favorable treatment.
So, let's get started. CNN IBN has already interviewed and made a few wishes/desires or 'feedback' as they call made known. First of many, i think ... Real estate thoughts, Power and Energy thoughts, International taxation issues, healthcare, bicycle manufacturers, Auto companies. Major media publications already have dedicated landing pages - Moneycontrol, Economic Times,
The worst of the lot - FirstPost asks "Budget 2012: Should you give a damn?" My friend, can you stop giving it a damn! Wait for a month and Pranab-da will introduce the budget and we can analyse it rather than day dream today ... What say?
PS: I wrote a blog post earlier related budgets. Differenet context but the data points are amusingly/sadly pretty similiar.

Wednesday, September 01, 2010

With due respects Mr. Ramiz Raja, you are wrong!

No sooner did Ramiz Raja express outrage at the spot fixing scandal, did he backtrack on one case and ask sympathy for Mohammad Amir. Geoff Lawson, the ex-Pakistan coach joined soon.

Their strawman defense? Mohammad Amir comes from a poor background and he was 'ensnarled' in the controversy. They couldn't have played a worse card - "he comes from poor background, he wants to buy a generator for his village!" - Oh! they did!

There have been numerous cricketers who have started from the bottom of the pyramid - Irfan Pathan & Yusuf Pathan are top in my list of mind recall. Vinodh Kambli was another such cricketer from a stark background. Sachin Tendulkar, MS Dhoni, Kapil Dev amongst others come from strictly middle class backgrounds. None of them took to spot fixing and receiving money for bowling no-balls or batting maiden overs.

While a certain amount of blame has to be apportoined to the suits running cricket in Pakistan, Amir had the choice to say no and go to the press. He took the path of least resistance - chalta hai and hence is as guilty or innocent as the others. He was happy to receive the cash when it was in the dark and turns on an innocent face as soon as his trick gets public.

The third angle and the most intruiging is that PCB wants to take action only after legal proceedings take place. My dear suits, that is a such a weak defense of your action. The laws of the game is more stringent than that of criminal liabilities. How can anyone prove that the betting was a criminal activity? ACC head feels so. PCB believes it can let the legal recourse meander and when the charges are diluted and the perpetrators go unpunished, absolve themselves of any action against the tainted cricketers. Don't fear for cricket as they will definitely hire a retired judge to give semblence to their pre-determined action.

The suits have it all wrong. Cricket laws are far more stringent than the public court. Else, how many of us face charges or reduction in salaries because we finished our sales presentation in 70 mins instead of 60. How many folks face fines and suspensions because we disagree with our bosses and don't shy away from telling them. Poor Virat Kohli, he should have revered to spot fixing instead of staring an umpire for 15 seconds for a dodgy decision. He would have received lesser punishment. The laws of cricket are very stringent on disrepute to the game.

And Mr. Ramiz Raja knows it. In spite of the same, he wants to present the strawman defense so that they check the reaction for potential let-off of Mohammed Amir. Poor Salman Butt & Asif - they should have been a little younger to have got this special treatment

Sunday, February 07, 2010

Media & GoI: Rules are different for Telangana & Mumbai

When the Shiv Sena and all narrow minded bigots proclaim Mumbai only for Maharastrians, everyone (rightly so!) condemned it unequivocally.

When TRS and all narrow minded bigots proclaim Telangana & Hyderabad only for themselves, the media (Dr Prannoy Roy, i am looking at you!) and GoI are falling head over heels in giving credence to their claims.

The issue of Telangana highlights how removed our ministers & politicians are from realities. I want to compile some WTFs from Telangana interviews.

1. Telangana is required because Telugu Industry has no film hero from Telangana. Seriously! Even if i take his claim in any amount of seriousness, Rayalaseema & not Telangana provides the much wanted, bad guys of Telugu industry. May be Dr. Srinivas Raj is correct, Telugu film industry don't see hero or villan material from Telangana.

2. Hyderabad & Telangana was a wealthy region in 1956 and have become backward after Andhra Pradesh. Another seriously ill-thought talking point. Either the region was traditionally backward or it wasn't. Just because Usmain Ali Khan was declared World's richest man, doesn't make the region wealthy. Else, with the Ambani brothers, Mittal, Premji, India should be the most wealthy country!

3. While Dr. Srinivas Raj states that Industries have been set in Telangana without benefits to Telangana populance, Dr K Jayashankar claims the oppposite. No industries worth mentioning has been set in Telangana. Companies like Dr. Reddy's Lab don't count in his view

4. Telangana leaders see Andhra folks in Hyderabad as tenants. No worry guys, you might have bought property in Hyderabad but we intend to convert the region into a Zimbabwe a few years down the line. You are free to stay till then!

5. Muslims in Telangana region are asking for a seperate state for any of the following reasons. At 20%, they will have a major say in the politics of the region, Andhra Pradesh didn't have a muslim CM. Telangana will give Muslims the right to ask the GoI to impose a Muslim CM.

6. Telangana was a great state under the Nizams. The feudal system in Nizam rule will return. Folks, don't let small matters like facts stand in the way. Telangana was a backward state with the World's richest man ruling it with such a heavy hand that he fought against integration into India. Nostalgia doesn't change facts!

7. Andhra people look at Hi-tech business for job creation while Telangana leaders believe Charminar has magical job generating features (built by the Nizams, do doubt!) that hasn't been leveraged. Seriously! does this point any merits for debate!

8. Muslims want Mulki rule to be implemented. What's the Mulki rule? Mulki rule mandates that any outsider will have to live 14 years in the state to be eligible for equal rights. Bal & Uddav Thackrey, Ashok Chavan, please move. You might made the utmost efforts to win the "Stupid Politician" of the year award. But Telangana leaders win it with ease. Some sense was put into Telangana leaders and now they acknowledge that Mulki might be unconstitutional. Might?

9. KCR claims that Andhras make no more than 5% of Hyderabad's population. Given that everyone agrees that the population of Hyderabad is around 7.5 million, Andhra population is 375,000 as per KCR. Muslim leader Lateef Mohammad Khan claims that 385,000 of the 600,000+ government jobs in Telangana has bee occupied by non-Telangana region people. Putting these 2 stats together, every non Telangana person in Hyderabad is a government employee. If you haven't received your salaries and arrears, contact KCR & LMT.

10. If the region is as backward as their leader's claim, how can a region with 45% area have 43% share of population? How can the backward region provide 60% of revenues for AP? How does that claim make any sense?

11. And there is this site - which spews all incorrect numbers as facts. A few mis-statements. 
  1. I know a lot about the Pollavaram project. Even if i didn't, a quick check provides the following information - Pollavaram is a village in West Godavari district. How can someone divert 405 TMC to Andhra after the water have already reached Andhra?
  2. Telangana is hilly & forest area. How can they have 11.25 lakhs areas of lost agricultural land?
  3. 65% industries in Telangana is from Andhrites. So? Doesn't that give employment opportunities to Telangana folks?
  4. Ramagundam moved to NTPC and deprive Telangana of electricity. Seriously? NTPC is run by Andhra? Ramagundam power is mostly routed to Tamil Nadu as part of the South India grid. That's the fact
  5. Mumbai, Chennai, Delhi & Kolkata aren't free zones? Seriously, what is a free-zone? When did the Constitution start Free-zones folks?
  6. How can a backward region contribute 74% sales tax? 66% excise duty? 
  7. Telangana people were forced to sell land at dirt cheap prices to Andhra people. Or so goes the story .. 
In summary, i believe that politicians are being opportunists and trying to create statistics from nothing. We saw linguistics politics in the 50s & 60s, caste politics in 90s and now we are seeing regionalism for this decade. Telangana needs development and that isn't questioned. In fact, Telangana will receive development as subsidiary from Andhra's prosperity. 

It is sad that media is also playing a double role in denouncing regionalism in one area and encouraging it in another area.